Niva Bupa IPO: Should you subscribe? Price band, listing among other key details

Niva Bupa IPO opened for public subscription today in the primary market to raise Rs 2,200. Niva Bupa Health Insurance Company Ltd, formerly Max Bupa Health Insurance Company reduced the issue size as it was earlier looking to raise Rs 3,000 crore.

The company's initial share sale which opened for public subscription today will conclude on November 11. The price band has been fixed at Rs 70-74 per share.

Bajaj Broking, in its IPO note, has underscored its expertise in claims and provider management, alongside a diverse product portfolio tailored to meet various customer needs, as key strengths of the company.

However, the note also flags critical risks, noting that profitability relies heavily on precise estimation of medical expenses and claims. Additionally, the possibility of regulatory inspections by the Insurance Regulatory and Development Authority of India (IRDAI) may pose reputational challenges.

The analysts at the domestic brokerage have given 'Subscribe' rating to the IPO for long-term.

"If we annualize FY25 earnings to the post-IPO fully diluted equity base, the asking price results in a negative price-to-earnings (P/E) ratio. Based on FY24 earnings, the P/E ratio stands at 642.22. Consequently, the issue appears to be aggressively priced," it added.

Niva Bupa Health sets price band of Rs 70-74 a share for its IPO

The company's shares in the grey market are trading flat.

The shares of the company will be listed on the exchanges on 14th November, Thursday. The successful bidders will be allotted shares of the company on 12th November. They can check their allotment status on the official website of the registrar, KFin Technologies Limited.

As part of the OFS, Fettle Tone LLP will sell shares worth Rs 1,050 crore, while Bupa Singapore Holdings Pte Ltd will offload shares valued at Rs 350 crore.

Currently, Bupa Singapore Holdings Pte Ltd holds a 62.19 percent stake, and Fettle Tone LLP holds a 26.8 percent stake in the company.

The proceeds from the fresh issuance are intended to bolster the company’s capital base, enhancing its solvency levels, with a portion earmarked for general corporate purposes.

This will be the second standalone health insurer looking to float an IPO, after Star Health & Allied Insurance Company.

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